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The Dual Labor Market

The study of labor market segmentation, i.e. the distribution of workers and jobs on individual sectors revealed the theory of the dual labor market. It involves the division of market into two markets: primary and secondary.

The primary labor market is a market with the so-called good jobs. They are characterized by five features: stable employment; a high level of wages; availability of career; the use of advanced technologies, low-skilled workers; the presence of strong labor unions.

This labor market includes professionals and highly skilled workers employed in high-tech and complex production processes.

The secondary labor market has inverse characteristics. It has bad jobs and the following features: high staff turnover; low level of wages; the absence of promotion; use of primitive technology; the absence or weakness of labor unions. The secondary labor market includes low-skilled workers of simple auxiliary production and auxiliary workers of basic production.

There are several reasons for this division. Firstly, the state of the enterprise technology determines the structure of jobs. Not all jobs require high qualifications. In enterprises, especially large ones, alongside the works that require high skills, there are auxiliary jobs, which do not require special knowledge, for example elevator operators, cleaners, porters and others.

Secondly, the production depends on the market’s ups and downs. Under such conditions, enterprises should be able to increase or decrease the amount of labor. Therefore, their staff is divided into permanent and temporary employees that relate to the secondary labor market.

The dual labor market division into primary and secondary is of practical importance not only for the regulation of employment on enterprises, but also for the local public employment services that are directly involved in the promotion of employment of the unemployed. Unemployment category is first of all represented by those who worked on the works of the secondary labor market – unskilled workers.

Another explanation for the dual labor market is associated with the theory of efficiency wage. A number of firms and industries require high costs for the control of the performance of employees. The alternative to such control is establishment of effective wage above the equilibrium, which leads to the segmentation of the labor market.

The dual labor market has an impact on the wage distribution. If a competitive non-segmented labor market is characterized by a normal distribution of wages, then the dual labor market is characterized by the bimodal distribution.

The study of labor market segmentation, i.e. the distribution of workers and jobs on individual sectors revealed the theory of the dual labor market. It involves the division of market into two markets: primary and secondary.

The primary labor market is a market with the so-called good jobs.

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Assignment ID
100001341
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CREATED ON
August 26, 2016
COMPLETED ON
August 27, 2016
Price
$8
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Ariel0525
November 27, 2016
Ariel0525
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